Dow at 2-year high

If you are going to say that the high unemployment was alreadys set in stone than you should also acknowledge the economic recovery was already set in stone too and all of the things you associate as positives were set in stone as well. The recession was 14 months old when Obama took office. It ended 5 months after he took office. The Fed flooding the banks and the market with liquidity is what led to the recession ending and that was already done before the new administration took office.

Flagpole wrote:

1) I know that unemployment was lower when he took office (actually 7.7% in January 2009, not 8%), which is why I worded it the way I did...I'm no fool brother!. Unemployment though is a LAGGING indicator. The high of 10%+ to come was already set in stone when Bush was still in office.

1) Commodities are VERY risky and take a lot of constant action to manage. I'm not interested in either thing. Yes GOLD has done better than stocks in 2010, but the last 3 years have been an anomaly for gold (took 27 years...from 1980 to 2007...to get back to where it was in 1980). Invest in it if you like, but for me, it's hands off.2) I'll stick with my advice on investing. When I started in 1989, my wife and I were concerned about inflation, and, since we were living in the SF Bay Area at the time with no plan to buy a house and live there, we decided that instead of sinking money into a home that we would invest in the stock market...to the tune of 50% of our income for 7 years. After that, we had children and so we cut back our investing to a more reasonable amount based on one income. BUT, we still do more than most even today, and while the first 7 years likely is enough for us to be able to retire comfortably, the continued investing is to retire even more comfortably and as soon as possible.3) It's really very simple. IF you are overly concerned about inflation or the devaluation of the dollar, then what you do is spend less and put more away (and investing in the stock market is the safest idea yet still with potential great gains) than you were.4) Now, do I see devaluation of the dollar long term? Depends on what you mean by long term? By the time I retire in 2026 (or even as early as 2021), I expect to have seen the dollar gain strength at least once in there, and likely dropped again too. It doesn't really bother me that much one way or the other. I don't just own US stocks. If you retire with NO debt including owning your home (which I will do), and you have a decent retirement account, you can live on a fraction of what you did while working. Experts say 70-80%, but if you retire debt free, you can do it on less than that even. In my case, I should retire with MORE income than I had while working...only to be boosted again when I'm 62 by Social Security. I don't really deal in fear. Many people do. Best to just anticipate that you will need a LOT of money and then invest heartily so that you will have that.

Vendor At The Running Event wrote:

5)No combat troops in Iraq.

Flat out bullshit..all they did is change the definition of the troops deployed.

Definition AND mission. Still a change for the positive.

The problem you're having is that you think I'm giving Obama credit for all the good things. I'm not. Those good things have simply happened under his watch...as I said. What I am saying though is that it is ridiculous for anti-Obama people to rip him for the unemployment rate, their stocks, not ending the tax break for the rich (this one really gets me...the REPUBLICANS are the ones ripping him because they say he's not kept a promise...well, he also promised to work with Republicans, and in this case he is...sometimes you have to be conciliatory to make progress).I don't believe Obama has caused all the good, and I don't believe Bush caused all the bad (actually I can most easily go back to Clinton and point out the things he did with regard to housing that had a BIG hand in causing the housing crisis). Mostly though, Americans STILL have enough power and enough of their own constitution to be able to get themselves to a place of prosperity DESPITE what the government does.The fact that Obama came into office in the middle of a recession and will end his first term out of the recession with a much-improved stock market bodes well for his re-election. He will be re-elected and after two terms will be considered eventually in history as one of the best presidents we've ever had. Not saying this is deserved...just saying that it will be.

Some Common Sense wrote:

If you are going to say that the high unemployment was alreadys set in stone than you should also acknowledge the economic recovery was already set in stone too and all of the things you associate as positives were set in stone as well. The recession was 14 months old when Obama took office. It ended 5 months after he took office. The Fed flooding the banks and the market with liquidity is what led to the recession ending and that was already done before the new administration took office.

Flagpole wrote:

1) I know that unemployment was lower when he took office (actually 7.7% in January 2009, not 8%), which is why I worded it the way I did...I'm no fool brother!. Unemployment though is a LAGGING indicator. The high of 10%+ to come was already set in stone when Bush was still in office.

Great for stocks, but in the real world, I can’t see the US has any plan whatsoever to get to grips with the biggest debt in history.

The US is now servicing $13.8 trillion in declared liabilities and $414bn of your taxpayers money went on interest payments I the past year.

Over four times your education budget.

And alarmingly, your borrowing cost went up a massive 28pc in the last month! - with the 10 year treasury yield reaching 3.33pc (Germany 3.03) - and that can only go up.

According to your own Treasury Department figures back in June, your debt will reach $19.6 trillion by 2015, but since then, government spending has risen even more.

And what about this new round of tax cuts?

That’ll add another $1trillion to the US deficit - making the 2015 figures horrendous.

And as for the budget deficit - in November alone, the US government spent $150.4 billion more than it collected in taxes.

Any chance of those of you making money in stocks, putting your hand in your pockets to help bailing out Uncle Sam?

Alf Shrubb wrote:

And what about this new round of tax cuts?

That’ll add another $1trillion to the US deficit - making the 2015 figures horrendous.

Nobody is getting an income tax cut. What is being discussed is keeping the current rate, or raising taxes.

The deficits aren't caused by not enough taxes being collected. They're caused by too much spending.

"Nobody is getting an income tax cut. What is being discussed is keeping the current rate, or raising taxes."

There we go with this bullshit again!

Obama and Congress (both Democrats and Republicans) are playing a dangerous game of chicken with the economy, by ratcheting up program spending, FNMA and FHMC bailouts, international bank debt bailouts, and car company bailouts.

As with any other game of chicken, my bet is not on a safe result, where no one gets hurt. Many will be hurt, including most Flagpole type "investors," who are leaving their money in a system that can be flushed very rapidly.

A little premature flagpole don't you think. Sort of like you prematurely ejaculate with your wife.

Flagpole wrote:[/ He will be re-elected and after two terms will be considered eventually in history as one of the best presidents we've ever had. Not saying this is deserved...just saying that it will be.

Some Common Sense wrote:

If you are going to say that the high unemployment was alreadys set in stone than you should also acknowledge the economic recovery was already set in stone too and all of the things you associate as positives were set in stone as well. The recession was 14 months old when Obama took office. It ended 5 months after he took office. The Fed flooding the banks and the market with liquidity is what led to the recession ending and that was already done before the new administration took office.

flagpole:

you are not seriously under the belief that you will receive any $ from social security are you??

if the program exists then, there will be a grade tax and you will be taxed at 100% of your benefits so you will get nothing from social security

it is strange to me that you do not seem too concerned with the future economic conditions given that your personal fiscal policy is inopposite to that of the USA govt.

I applaud your fiscal approach, but I fear that when you are retired that Uncle Sam will come a knockin on your door and he won't be bringing you anything ... he'll be there to take, kinda unfair to you for being smart all these years with your $

Blowing.Rock Master wrote:

The deficits aren't caused by not enough taxes being collected. They're caused by too much spending.

They are caused by spending more than we collect in taxes. Your opinion that we are spending too much is just an opinion (just as my opinion that we do not tax enough is just an opinion). What is almost unambiguously true is that there is no practical way to resolve the deficit without both spending cuts *and* increased taxes (and the use of the word "practical" there should probably be taken as ironic).

Fire and Ice wrote:

Flagpole,

When you consider the value of the Dow and your general it is always a good time to invest, do you factor in the devaluation of the dollar?

In a nutshell although U.S. financial assets might be going up in nominal terms, the devaluation of the U.S. dollar means that relative to virtually everything else, U.S. financial assets are losing value.

The stark reality is that things are not good.

I don't understand this view - could someone explain it to me?

Inflation is about 1.5%. So how is a stock market up 11% this year losing value?

And what is this 'everything else' of which you speak?

Unless you are saying inflation is greater than 11% but the government stats lie. Weak sauce that explanation.

So please do help me understand.

Fire and Ice wrote:

flagpole:

you are not seriously under the belief that you will receive any $ from social security are you??

if the program exists then, there will be a grade tax and you will be taxed at 100% of your benefits so you will get nothing from social security

it is strange to me that you do not seem too concerned with the future economic conditions given that your personal fiscal policy is inopposite to that of the USA govt.

I applaud your fiscal approach, but I fear that when you are retired that Uncle Sam will come a knockin on your door and he won't be bringing you anything ... he'll be there to take, kinda unfair to you for being smart all these years with your $

1) Will I get Social Security in 18 years when I'm 62? You bet I will. Will it be to the tune of about $50,000 per year in future dollars for me and my wife (well, I have to be 63 when she turns 62 for that to happen) as is what the SSA prediction calculators say for me? I doubt it. I'd bank on about 70% of that though. Getting nothing from Social Security is bogus brother. Ain't going to happen.

2) Why should I be overly concerned about the future economic conditions? If YOU were to get yourself to age 60 and then retire with enough in investments so that if you took just 4% from it that you would make decently MORE per year than you did while working, AND you retired completely debt free so that your expenses were less than they were while working, and you haven't yet even included Social Security which would happen at age 62, then why would you be worried? Invest enough, and it matters NOT too much what the government does.

3) When I retire, I will be considered wealthy. That Uncle Sam comes and takes a bit more from me does not concern me at all. I'll still have more than enough to live the life of travel and leisure and giving that I'm planning. It's NOT that hard to do...pretty much ANY professional has the ability to save a ton of their income and retire with a shitpile of money if they want to...they simply don't want to. By investing you can attain wealth that most cannot make through working income alone. This can be so great that even a HUGE increase in taxes will not take away the great life that such income has built.

4) IF (and I don't believe they will be) your fears are all realized, then how much better is the life of someone who didn't invest or save at all? Answer is NOT better at all, so when playing percentages, it is best to PLAN to have a lot of money in retirement than not. What CAN happen then is that you do better than you thought you would. I can't explain why this is, but I have consistently done better than the Dow for example. In 2010, the Dow has gone up 10.05% YTD. Not even including today's run, I'm up to 18.7% YTD, and it will be higher (above 19%) tomorrow morning. My stuff ALWAYS does better like that (some of it is from dividends). I thank funds at Vanguard and Fidelity for that.

Fire and Ice wrote:

http://graphics.thomsonreuters.com/F/08/CRB_YTD.gif

was this an explanation? The price of cotton is up so my dollars are worth less? What sense does this make? I don't do a lot of buying of raw cotton, do you?

In the store, where I actually buy things, prices are up a percent or two.

Flagpole,

You have investing almost nailed down. I mean that. Not many people do, but you seem to get it and have the temperament for it.

However, on the point of paying down your mortgage, you are way off. You should be taking out as much debt now as possible. Reinvest the money in the market. Beating the 4% cost of your money is a pretty low hurdle. The mortgage expense is tax deductible (at least for now), and the debt is non-recourse to you (you can walk away from the house/debt without losing the rest of your assets). As a sweetner, it provides a nice, free hedge on inflation, as the value of your debt remains fixed in nominal terms. It is quite hard to do better than this.

Think about it. Seriously. Don't need to invest the whole sum at once, you can just leave is as cash for a while and invest it over a few years.

agip wrote:

Fire and Ice wrote:http://graphics.thomsonreuters.com/F/08/CRB_YTD.gif

was this an explanation? The price of cotton is up so my dollars are worth less? What sense does this make? I don't do a lot of buying of raw cotton, do you?

In the store, where I actually buy things, prices are up a percent or two.

Don't worry about the naysayers brother. Pay down debt quickly. Invest 15% of your income OR MORE into good growth stock mutual funds. Eventually pay off a house so that when you retire you have ZERO debt. Your investments will FAR outpace inflation and/or devaluation of the dollar. BELIEVE IT!

dude even if I spend more time trying to explain to you, you don't necessarily have to agree with it

its pretty much basic macro economics, but her you go:

http://en.wikipedia.org/wiki/Keynesian_economics

either you are a keynesian or you are not, and even if you are you can disagree about the state of the economy, where it should go, and the policy decisions to try to get there

also, somebody is buying a lot of cotton and driving prices up, if it is not you or flagpole then the Duke brothers must know something

Social Security is won't disappear. While its financial problems are severe, there a number of steps that could be taken to keep it solvent. These steps could include 1) reducing the formula for the percent of SS early retirees get. Currently a 62-year-old can draw 75% of full SS benefits. Reducing that to 60% would result in a tremendous savings because over half of boomers are signing up for SS at age 62. I did a spreadsheet projection of this a while back and the savings were impressive. 2) Phase full SS eligibility (currently age 66) out to age 70 over the next 15 years or so. 3) Remove the cap on SS withholding or raise it to $1 million. 4) Raise the taxes on SS benefits for high income retirees.